The Biden administration is seeking $1.6 billion in funding to help prosecutors track down and recover government funds that were fraudulently distributed under COVID-19 pandemic relief programs.
On a call with reporters on Thursday, White House American Rescue Plan coordinator Gene Sperling laid out a new plan by the Biden administration to prosecute pandemic fraud. The plan calls for Congress to extend prosecution deadlines and provide more funding for additional resources to pursue fraud cases. The plan also calls for establishing new safeguards against identity theft, which fraudsters have used to obtain funds set aside in pandemic relief programs.
The Biden administration intends for about $600 million of the total $1.6 billion to go toward forming at least 10 new Justice Department task forces to prosecute pandemic fraud, in addition to the three that already exist.
In his call with reporters, Sperling argued the money the Biden administration is requesting could result in the recovery of an even greater sum of money.
“It’s just so clear and the evidence is so strong that a dollar smartly spent here will return to the taxpayers, or save, at least $10,” Sperling said.
After COVID-19 spread throughout the United States in 2020, state and federal public health officials encouraged a variety of measures to limit the spread of the virus, including self-isolating, limiting crowd sizes, limiting personal travel, and even closing down “non-essential” businesses. As a result of these measures, many businesses closed down and unemployment jumped.
“On the whole, those programs did enormous good,” Sperling said. “There were also cases where guardrails were unnecessarily lowered, which led to unnecessary and massive fraud.”
More Time to Prosecute Fraudsters
In addition to requesting more money for investigators and prosecutors, the Biden administration plan also calls for extending the statute of limitations for prosecutions of this nature from about five years to 10 years.Last month, government inspectors and accountability officers testified before Congress that they don’t believe they currently have enough time to investigate the full extent of the Unemployment Insurance (UI) fraud that occurred during the pandemic.
In addition to requesting an extension on the statute of limitations, Horowitz called on Congress to raise the jurisdictional limit for administrative recoveries of “smaller” false or fraudulent claims from $150,000 to $1,000,000. Horowitz said PRAC is aware of at least a million pandemic awards, totaling about $362 billion, that ranged from $150,000 to $1,000,000.
As time has gone on, the estimate of fraudulent pandemic spending has increased. In his testimony before the House last month, Turner revised a DOL estimate of potentially fraudulent pandemic-era UI payments from $163 billion up to $191 billion.
